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with Sean Sawyer, MS

Session: #055 | Scaling Up Trading Without Losing Emotional Balance

October 24, 2024

Key Points:

  1. Managing emotional balance is critical when increasing trade size.
  2. Tracking a “feel score” and progress daily helps stabilize emotions while scaling.
  3. Consistency and patience are essential to safely sizing up in trading.

Summary:

This session tackled traders’ familiar struggles when scaling their trades without disrupting the emotional balance. A key participant shared their experience of downsizing to micros to limit risk but felt limited by the reduced upside potential. Sean emphasized the importance of maintaining emotional balance before gradually increasing trade size, underscoring that it’s not just about scaling the number of contracts but doing so in a way that supports long-term success.

Sean introduced a systematic approach using a “feel score” to track emotional regulation throughout the trading day. Traders are encouraged to rate their emotional state, P&L, and time of day for each score, using these metrics over 20 days to identify patterns. This self-monitoring aims to keep traders emotionally neutral, ideally from -1 to +1. This data collection period allows traders to stabilize before adding additional size, ensuring the emotional comfort needed to handle the stress of trading more prominent positions.

In a powerful analogy, Sean compared the process of increasing trade size to systematic desensitization, akin to overcoming social anxiety step by step. Gradually exposing yourself to larger trade sizes in a controlled manner helps habituate emotional responses, making it easier to manage larger trades without increasing emotional volatility. “You’re habituating and using that to your advantage,” Sean noted, highlighting how these controlled steps help build confidence and resilience.

C.L.E.A.R. Mindset Connections:

  • Connect to the present moment and enhance your self-awareness with practical techniques.
    Traders were advised to track their feel score multiple times daily, promoting self-awareness and emotional regulation.
  • Loosen your attachment to thoughts and emotions and cultivate mental clarity and resilience.
    By focusing on stabilizing emotions, traders reduce their emotional reactions to profits or losses, aiming for balance before adding size.
  • Embody your core values and align them with your actions to foster authenticity and purpose.
    Scaling up trades gradually, in alignment with emotional balance, supports a sustainable, value-driven trading practice.
  • Accept all the present moment offers, whether wanted or not, and find peace and strength.
    Accepting the challenges of small and large trades allows traders to focus on long-term growth rather than short-term frustrations.
  • Respond with decisive, informed action, transforming challenges into opportunities for growth.
    Incrementally increasing trade size once emotional stability is confirmed provides an opportunity to build psychological and trading strength.

Actionable Strategies:

  • Use a feel score to rate emotional balance throughout the trading day and track progress for 20 days.
  • Aim for a neutral emotional state (-1 to +1) while trading to maintain balance and avoid emotional extremes.
  • Scale up only after confirming emotional stability with a consistent feel score across multiple trading sessions. To avoid emotional overwhelm, Treat each increase in trade size as a step in a larger process, similar to systematic desensitization.
  • Review the four-step process regularly to maintain focus and alignment with your trading goals.

Act Accordingly:

Maintaining emotional balance is critical as you scale up your trading. By systematically tracking your emotional state and gradually increasing trade size, you create a foundation for psychological and financial success. Stick to the process, use the data to guide your next steps, and remember that mastering your emotional responses is just as important as learning your trade strategy.

Sean Sawyer, MS

Psychotherapist | Performance Coach

Sean Sawyer, a psychotherapist since 2003 and full-time trader since 2017. Sean uniquely blends psychology and trading, offering insights from both worlds. His experience in psychological trauma and performance psychology helps individuals master decision-making and resilience in high-pressure situations.